Malaysia’s grey economy at 21% of GDP

Malaysia’s Grey Economy At 21% Of Gdp

The size of Malaysia’s shadow economy stands at around 300 billion ringgit a year, more than $74 billion or around 21 per cent of gross domestic product (GDP), according to the country’s finance minister Lim Guan Eng, who spoke at a conference in Kuala Lumpur on November 11.

This was higher than the shares of 15 to six per cent of GDP in less developed countries and rich countries, he noted, adding that integrating just a fifth of the informal into the formal sector could bring Malaysia between $1.2 billion and $3.6 billion in additional revenue, he noted.

The shadow economy includes economic activities in the informal labour, trade and services sectors, but also corruption and tax avoidance on assets hidden from official authorities for monetary, regulatory and institutional reasons.

“One of the factors of the shadow economy is corruption, and it is only when we share information can we adopt similar measures to reduce corruption,” he said.

He also blamed Malaysia’s large shadow economy on kleptocracy by the previous Barisan Nasional federal administration.

“Now we are a democracy and we have to look at how we can bring the shadow economy level down,” he said, adding that the new government will ensure that financial scandals such as the one surrounding 1Malaysia Development Berhad (1MDB) will never occur again.

He said with effective compliance and better sharing of information with other countries, tax administrators can better calibrate their systems against tax evasion and corruption.



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The size of Malaysia’s shadow economy stands at around 300 billion ringgit a year, more than $74 billion or around 21 per cent of gross domestic product (GDP), according to the country’s finance minister Lim Guan Eng, who spoke at a conference in Kuala Lumpur on November 11. This was higher than the shares of 15 to six per cent of GDP in less developed countries and rich countries, he noted, adding that integrating just a fifth of the informal into the formal sector could bring Malaysia between $1.2 billion and $3.6 billion in additional revenue, he noted. The shadow...

Malaysia’s Grey Economy At 21% Of Gdp

The size of Malaysia’s shadow economy stands at around 300 billion ringgit a year, more than $74 billion or around 21 per cent of gross domestic product (GDP), according to the country’s finance minister Lim Guan Eng, who spoke at a conference in Kuala Lumpur on November 11.

This was higher than the shares of 15 to six per cent of GDP in less developed countries and rich countries, he noted, adding that integrating just a fifth of the informal into the formal sector could bring Malaysia between $1.2 billion and $3.6 billion in additional revenue, he noted.

The shadow economy includes economic activities in the informal labour, trade and services sectors, but also corruption and tax avoidance on assets hidden from official authorities for monetary, regulatory and institutional reasons.

“One of the factors of the shadow economy is corruption, and it is only when we share information can we adopt similar measures to reduce corruption,” he said.

He also blamed Malaysia’s large shadow economy on kleptocracy by the previous Barisan Nasional federal administration.

“Now we are a democracy and we have to look at how we can bring the shadow economy level down,” he said, adding that the new government will ensure that financial scandals such as the one surrounding 1Malaysia Development Berhad (1MDB) will never occur again.

He said with effective compliance and better sharing of information with other countries, tax administrators can better calibrate their systems against tax evasion and corruption.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

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Donation Total: $10.00

 

 

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